Average rents rose, rent arrears dropped and lettings times became faster in the first quarter (Q1) of 2013, Countrywide’s latest quarterly lettings index, which is based on over 50,000 properties, shows.
The firm report that rents increased across much of UK, led by Wales and the East of England, where rents rose to £616 and £814 per month respectively.
Average rents in outer London increased by 5.4% year-on-year to £1,107 per month. The highest rents were in Inner London at £2,387 per month in Q1 of this year, up 1.9% from the prior year.
Increasing rents and stabilising property prices are making rental yields highly attractive to investors, with the average yield at 6.2%.
However, rents fell in the South-East, down 1.1% to £1,054 per month.
In Scotland average rents also fell, down 2.6% to £580 per month. Scotland was also the only region in the UK with an increase in arrears, up 2.6% from the prior year to 6.6% of the rent roll.
Inner London had the highest arrears at 7.3% of rents due, despite a drop of 0.1% over the year.
The highest rental yield was in Wales at 6.7% closely followed by both the North and Midlands at 6.5%. The lowest rental yield was in Inner London at 4.6%.
Based on the average yield and the Q1 2013 average monthly rent of £835, the average investor could expect to make a total annual return of approximately £10,000 per property over the next 12 months.
Countrywide found that the average time it took to let a property in the first quarter of 2013 was 14.5 days, down on last year when it was 15.1 days.
Nick Dunning, Group Commercial Director at Countrywide plc, said: “The rental market continues to develop strongly with some interesting movement in market dynamics from London to the regions. The growing average monthly rents across the UK shows the increasing attractiveness of regions outside London. London remains a good place to buy property, but investors are venturing further afield for investment opportunities.
“Scotland is an anomaly to this – with falling rents and increased arrears being compounded by recent legislative changes, investors might be deterred from buy-to-let investment.”Source: Property Investor Today